Activism: Taste for large-cap targets picks up in 2017


Almost a third of US targets in first half of year were large caps, shows Activist Insight data


Shareholder activists renewed their appetite for US large caps in the first half of the year, with almost a third of companies subjected to public demands by activists having a market cap of more than $10 bn.

This compares to an average of 27 percent between 2013 and 2016 – and 26 percent in the first half of last year. That’s according to data from the Activist Insight Monthly half-year review 2017, produced in association with law firm Olshan Frome Wolosky.

‘Activists have responded to a turnaround in the markets by making ever more concentrated bets on large-cap companies,’ notes report editor Josh Black in a press statement. 

In fact, more than 100 large-cap companies were targeted in the first half of 2017 – a number that exceeds the total of any year since 2010 and crosses ‘a threshold approached in recent years’ (numbers of large-cap companies targeted in 2015 and 2016 were 94 and 96, respectively).

Small-cap companies are the next most popular target for activists so far this year, with this group accounting for a quarter of all public campaigns, representing a 3 percentage-point increase. Mid-caps accounted for 19 percent, up 2 percentage points from the first half of 2016. 

These increases have come as activists have moved away from micro-caps (14 percent in the first half of 2017, down from 19 percent in the same period last year) and nano-cap companies (11 percent this year, down from 17 percent in the first half of 2016). 

‘Despite high profile campaigns at Nestlé and BHP, activism in Europe and Asia appears flat or slightly down,’ adds Activist Insight in its press release.


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